When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - Amazon.com, Inc. (AMZN) – BUY
Buy Amazon.com, Inc. (AMZN) May 2023 $92-$97 in-the-money vertical BULL CALL spread at $4.25
Opening Trade
5-1-2023
expiration date: April 19, 2023
Portfolio weighting: 10%
Number of Contracts = 23 contracts
AMZN is down another 2.5% this morning on a poor earnings forecast.
We are purchasing the dip.
This is a short-term mildly bullish trade on Ecommerce Company Amazon (AMZN) that AMZN will stay above $97 in the next 18 days.
Amazon is expecting lower growth in the cloud and its weak forecast was also echoed in META which is also presiding over a slow growth but profitable business.
Much of the gains in tech have shown up in 7 stocks which is why the Nasdaq is up 18% on the year.
Granted, the appreciation has been very choppy with January and March being quite spectacular.
After another bank bailout, this could give us some stability in the next 18 days and AMZN has strong technical support at $97.
I am willing to jump into this for a trade.
Here are the specific trades you need to execute this position:
Buy 23 May 2023 (AMZN) $92 calls at………….………$11.35
Sell short 23 May 2023 (AMZN) $97 calls at…….…….$7.10
Net Cost:……………………..…….………..............….….....$4.25
Potential Profit: $5 - $4.25 = $.75
(23 X 100 X $.75) = $1,725 or 17.65% in 18 days
If you are uncertain on how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
